CONSUMERS: PARTNERS IN BISON RESTORATION
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1 CONSUMERS: PARTNERS IN BISON RESTORATION Laurie Demeritt CEO The Hartman Group 1 Macro Trends Affecting the Food Marketplace Single person households Non-traditional families Time starvation Shrinking middle class Decreased, but shared, food prep Less rigid, from scratch, cooking Snackified eating Obesity rates Customized diets Global cuisine 1
2 Three Strategic Platforms for Bison Producers Premium Health & Wellness Sustainability Upgraded experiences Everyday occasions Marketplace growth Fresh, less processed Nutrient density Organic, natural and local The power of the purchase Meaningful narratives Animal welfare 3 Premium is about upgraded experiences Premium is not Price alone Reserved for the elite or sophisticated Only for special occasions About low fat, low sodium, or low calorie Communicated via words alone Premium is People, places, and traditions Real distinctions in quality Expressed through values and experiences About intentionally making things better Transparency and trust Pleasure and discovery 4 2
3 The new premium The new premium quality is characterized by fresh ingredient profiles and specialized, high-quality production and sourcing techniques. Younger Brands Are Outperforming Legacy Ones Legacy Non Legacy: Premium 39% 49% 16% 4% 12% 80% Already over 9% of the total retail food & beverage market (and growing at 3X the rate of the overall food and beverage market) premium brands will continue to set the bar for consumer expectations. 5 Health + Wellness is about maintaining balance in physical health, mental health, and lifestyle Health + Wellness Means Feeling good about myself Being physically fit Leading a balanced lifestyle Having the energy for an active lifestyle Not being ill Being able to deal with stress Being happy and cheerful Not being overweight Being alert and bright minded Being able to relax and have a good time 65% 64% 62% 59% 57% 56% 55% 52% 52% 45% 80% of consumers believe mental and emotional balance is as important as physical health 6 3
4 Consumers today idealize food that is close to its natural form Consumers across the board express the belief that food closer to its natural state is superior to food changed by scientific or industrial processes (particularly when that change is seen to be motivated by profit). At its most basic level, this means foods that are: Grown naturally Made simply Grown without unnecessary chemicals respecting rhythms and interdependencies present in nature Simple ingredients no unnecessary ingredients no unnecessary stages of preserving or processing 7 Consumers look for cues of fresh, less processed foods I Look for Food and Beverages That % agree strongly/somewhat Are good for my heart Are locally grown or produced Have added vitamins and minerals Are minimally processed Contain only ingredients I recognize Help lower my cholesterol Have the shortest list of ingredients Are antibiotic free Are hormone free Endorsed by health organizations Are non-gmo certified Are grass fed (animal products) Are labeled 'organic' Are fair trade certified Are cooperatively produced Are 'heritage' or 'heirloom' 75% 68% 65% 65% 65% 64% 58% 58% 57% 55% 53% 53% 51% 46% 43% 35% What is fresh? Fresh is not always an objective distinction Fresh is about food in its most natural state Fresh is a multi-faceted symbol that consumers use to make distinctions between options 8 4
5 Nutrient-dense foods promote satiety and good digestion Fiber Protein Vitamin D Whole grains Nuts and seeds* Calcium Olive oil Antioxidants Green tea Omega-3 Fish oil Healthy fats* Probiotics Plant-based protein* Sea salt Grass-fed beef* Omega-6 Coconut oil Grass-fed dairy* Flaxseed oil Top 20 Foods/Ingredients ADDING to Diet 43% 42% 42% 40% 39% 38% 32% 31% 31% 29% 29% 28% 24% 63% 60% 59% 58% 57% 54% 51% -9pp -5pp 9 +6pp A very wide variety of eating approaches are being explored Top 10 Eating Approaches in Last 12 months NET-ANY DIET 44% Low-carb diet* 12% Gluten-free 11% +5pp Dairy-free/Lactose-free Vegetarian Weight Watchers Whole foods diet (e.g., Whole30)* 11% 10% 9% 9% +3pp +4pp Juice cleanse or detox 9% +3pp Intermittent fasting* 6% Vegan 5% Paleo diet 5% 10 5
6 Organic purchase is motivated by avoidance of specific items Safer for me Avoid products that rely on growth hormones Avoid products that rely on antibiotics Avoid genetically modified products They are higher quality They taste better For nutritional needs Safer for the environment To support the environment Health reasons other than allergies To buy local products To support small/family farmers To support sustainable agriculture Top Reasons for Buying ORGANIC Food and Beverages - By Organic Purchasers - 21% 20% 20% 19% 26% 26% 25% 24% +4 pts 33% 36% 40% 39% 43% 45% +5 pts +8 pts 11 Local can oftentimes trump organic 38% (+9% from 2014) of consumers say they are buying more local than a year ago Local food and beverage continues to offer consumers a constellation of tangible benefits. These benefits can outshine those of organic, particularly when supported by a warm narrative. Consumers associate local with: Shared values and trust Smaller-scale production Support of local economy Freshness and seasonality Knowing where it s not from A sensible way of sourcing food 12 6
7 GMO avoidance is motivated by perceived potential health impacts 43% of all consumers are avoiding/reducing GMOs in their daily diet because Concerned about their possible impact on personal health Want to know exactly what goes into the food I eat Don t want to support companies that use GMOs Concerned about their possible impact on the environment Don't know enough about them Reasons Avoiding/Reducing GMOs - By Total - 36% 30% 27% 43% 66% Concerned about plant biodiversity* 21% 13 The number of those who prioritize sustainability purchasing is up significantly Frequency That Purchase Decisions Are Based on Sustainability Concerns 18% 18% 26% 26% 29% Frequent purchasers of sustainable products are more likely to be: Core 64% Millennials 42% Hispanic 50% Income $100K+ 41% College graduate+ 37% 62% 58% 50% 45% 45% Usually/Always Sometimes 20% 24% 24% 29% 26% Rarely/Never
8 Consumers increasingly believe their purchasing decisions have the greatest impact on society Which has the Greatest Impact on Society? 37% 36% 34% 39% 39% 45% 42% 36% 27% 22% 18% 25% My Purchase Decisions My Voting Decisions My involvement in local Community Which has the Greatest Impact on Society? 2015 By Age Cohort 40% 28% 48% 26% 32% 26% 30% 52% 18% Millennial Gen X Boomers Consumers want to support companies that prioritize treatment of both workers and animals Provides Quality Products Avoids Inhumane Treatment of Animals Provides Safe Working Conditions for Employees Supports US Economy Sells Products/Services at Low Prices Provides Products that Directly Benefit Me Provides Good Wages/Benefits to its Workers Tries to Reduce Waste and Pollution Truly Cares about Communities where it does Business Supports Local Economy Tries to Reduce Environmental Impact of Production Avoids Unnecessary Packaging Desirable Company Attributes - % Very Important 28% 31% 34% 34% 38% 37% 37% 44% 42% 47% 47% +7 pts +5 pts +6 pts 63% +6 pts +6 pts +9 pts 16 8
9 Animal Welfare As consumers now consider the entire lifecycle of a product as they assess its quality, animal welfare has emerged as one of the most important sustainability issues that can motivate paying a price premium. 44% of consumer say that to earn their trust, companies need to communicate how they treat animals used in their products Percentage of Consumers looking for 58% Hormone-free 58% Antibiotic-free 51% Grass-fed 17 Animal welfare is one of only two narrative attributes showing the trifecta of consumer interest, unit volume growth and correlation to sales growth Ingredients Production People Ingredients from Specific Growing Regions Degree of Care and Thoughtfulness Shown in Production Products Developed by Founder Products are Family Recipes Improve Animal Welfare Improve America s Health High Quality Ingredient Claims Make Better Tasting Food Improve Labor Conditions Ingredients from Exotic Global Locales Other Declarations of Passion/Enthusiasm Raising Money for a Good Cause Adherence to Artisan Quality Standards Specific Values in Production (e.g., Halal, eco-friendly) Ethical Claims Products Professionally created by chef/doctor Founder has Fitness/Sports Credentials or Expertise Founder has Culinary Credentials Founder is an Ordinary Person with Passion Founder Wants to Make Better Tasting Food 20 distinct narrative attributes were tagged, at the UPC level, across 8 different food and beverage categories. 18 9
10 Thought Starters There is increased complexity in consumer households today decision making is dispersed, there is limited food prep time, a diversity of eating approaches is being pursued, etc. Consider these factors when designing, distributing and communicating about your product The market is becoming increasingly fragmented due to the customization of consumer diets and preferences, the proliferation of new product entries, the diffusion of shopping channels, etc. Pursue specific usage occasions rather than targeting the mass market Leverage bison s premium positioning Bison has a quality halo that distinguishes it from the competitive set don t try to compete directly with beef, you are in a different realm Premium is defined by the people, places and traditions surrounding the product tell your narrative about these elements Embrace your status as a healthier product The nutritional value of bison meat aligns well with the growing demand for nutrient dense proteins The lack of manipulation and minimal processing in the production process squares with the modern meaning of fresh, less processed To the extent possible, execute on local, natural and non-gmo Continue to lead with sustainability practices Bison is inherently authentic and, therefore, consumers assume transparent practices ensure you are following through on these The primacy of animal welfare as a consumer driver should not be underestimated. And should not be misinterpreted it is linked to quality (health, taste) of the final product 19 The Hartman Group, Inc Richards Road, Suite 200 Bellevue, Washington hartman-group.com 10
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